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  • Why I'm Long Valeant And Getting Longer [View article]
    Have you even seen VRX balance sheet?

    What return on investment are you talking about when company lost money in 2012 and 2013 and Q1 14 and is likely to continue losing money in 2014.

    Of course operating cash flow has been increasing, but look how much they paid for that increase, their CF from financing is ridiculously negative.

    Their EBITDA barely covers interest payments. Their debt is rated as Junk. Their equity is equal to $5.3bn vs market cap $43bn. Their FCF has been negative in the last 3 years. Their lfl sales are flat.

    You can not even build a DCF valuation because the company is so messed up.

    How can you ignore all these factors?
    May 13 03:02 PM | 1 Like Like |Link to Comment
  • Why I'm Long Valeant And Getting Longer [View article]
    Learn to calculate FCF properly, if you add their M&A costs which is a type of CAPEX in their case it becomes very negative.
    May 9 10:12 AM | Likes Like |Link to Comment
  • Why I'm Long Valeant And Getting Longer [View article]
    Hey Bear, can you give me you thoughts on a couple of things:
    1) The fact that one of the key solvency metrics for Valeant, i.e. DEBT/EBIT is -42? Interest coverage ratio is negative too, 2013 EIBTDA/INTEREST is is close to 1! Which means company does not have enough to support its business after all the interest expenses, yet alone swallow a company which is just as big market cap wise.
    2) The fact that net tangible book value is just $487m whilst market cap is $43bn, and Equity is just $5.2bn
    3) Company has reported negative EPS in Q1 once you cut out the Non GAAP dust in your eyes nonsense.
    4) Valeant like for like sale growth- a true metric of efficient CEO has been +1% QoQ and declining in 2013.

    Are you still sure you want to be long this company? Do you really want to own a combined over leveraged entity comprised of a leech (VRX) and a cash cow (AGN) which will eventually suck the other one dry unless it collapses on itself beforehand.

    How about some real financial numbers, like DCF model, to back up at least some your analysis?

    Akcman just needs an exit, and he needs suckers to believe his story. Do not be one of them. PM me if you have any questions.
    May 8 03:38 PM | 6 Likes Like |Link to Comment
  • ModernGraham Quarterly Valuation Of National Oilwell Varco - March 2014 [View article]
    I think you got the right conclusion using the wrong assumptions. )
    Mar 25 08:26 PM | 1 Like Like |Link to Comment
  • Russia's Gazprom, European Energy And U.S. Oil And Shale Gas: Shorting Russia? [View article]
    You can not separate politics and Economics neither when dealing with a state owned monopoly nor when you are talking about global commodities trade. You have to take a stance and back it up with an argument or at least present several possible outcomes if you choose to avoid political commentary otherwise it is a very limited analysis.
    Mar 24 10:28 AM | 2 Likes Like |Link to Comment
  • Russia's Gazprom, European Energy And U.S. Oil And Shale Gas: Shorting Russia? [View article]
    An interesting summary but that is it, no in depth research. Are you saying short Gazprom? An insane proposition from the risk/return profile. One thing that westerners do not get is that nobody is obliged to please them or to seek their approval. Putin saw a geopolitical opportunity and exploited the weakness of the west, full stop. Gaining strategic naval port and some natural resources as well as getting close to Europe is a lot more useful than holding fake smiles at G8. I hope you do not follow into naive proposition that the US is driven by the willingness to spread democracy and freedom? Remember the Afgan war that Soviets started, the US was the one who funded the rebels who created Taliban, oops, that backfired... Iraq, 15 years of sanctions thousands dead after the war and country is on the brink of a civil war, did not work out that well did it? O and do not forget Yugoslavia bombings, how many people died there vs Crimea?

    Perhaps in the modern world there is room for more than one philosophy and a global policeman.

    I by no means approve many things about Russia, after all it still is an emerging market, I am just tired of reading same one sided arguments.

    As for Gazprom, it yields 5% based on 2012 payout and potentially 12% in case they follow suit of many government companies recently to pay out 25% of NI. P/E 3 for 2014 and 2.2 2013. Long term liabilities are 1/4 tangible assets. Building a a sufficient infrastructure to replace 30% of gas imports in Europe will take decades. Also you must know as a commodities expert that US shale gas production peaked in 2011. The Marcellus Shale can not prop up global gas trade redistribution on its own. Why don't you go and short crazy stocks like TSLA, NFLX or CSLT, a company with market cap of $2.5bn and only $17m in revenue, where valuations really are obscene.
    Mar 24 08:23 AM | 23 Likes Like |Link to Comment
  • Gazprom's Khosrazchyot Or Who Depends On Whom? [View article]
    Before posting empty arguments get your facts right, what is sizeable long term debt position for Gazprom that you are talking about? Gazprom's current liabilities are $36bn and its long term debt is $38.12bn whilst its tangible book value is $362bn. O and by the way Russian debt to GDP ratio is 10% vs 110% in the US (and treasuries are considered risk free, which is insane), what default risks are you talking about? And do not even start on the dividends, Gazprom is currently yielding 5.6% based on its payout in 2012, which may increase to 10% if they decide to pay out 25% of Net Income, you can keep your pennies in Suez.
    Mar 18 08:32 AM | 2 Likes Like |Link to Comment
  • Gazprom's Khosrazchyot Or Who Depends On Whom? [View article]
    Gazprom Eurobonds yield 6% in USD. I would take that any time. Honestly I believe there may be a lot of other better positioned investments out there. Would you put your own money in Suez?
    Mar 16 01:26 PM | Likes Like |Link to Comment
  • Gazprom's Khosrazchyot Or Who Depends On Whom? [View article]
    I'd say if you want to profit from the situation just buy Gas Futures/ETF GDF is a lousy choice.
    Mar 14 06:24 PM | Likes Like |Link to Comment
  • Alarming Sale By Ralph Lauren Indicates Stock Is Likely To Lag The S&P 500 [View article]
    Hm, have you not considered the fact that CEO is old and wants to retire, therefore does not need any more appreciation in his stock price but rather wants to cash in for retirement? He worked all his life and his health is not that great why care about the future price?
    Mar 14 06:18 PM | Likes Like |Link to Comment
  • Gazprom's Khosrazchyot Or Who Depends On Whom? [View article]
    OK, I will simplify, GDF will not be able to increase production and transportation capacity to make a dent in European gas import distribution therefore it does not make any sense to own it based on that premise.
    Mar 13 10:37 AM | Likes Like |Link to Comment
  • Gazprom's Khosrazchyot Or Who Depends On Whom? [View article]
    Hi There,

    1) Have you considered that fact that Gazprom is trading 2.2x 2013 PE and 3.4 projected 2014?
    2) What about an 8% dividend yield in case they will follow Rus Hydro along the path of state companies paying out 25% of earnings as dividends. As you may have guessed the gov-t is trapped for cash.
    3) Gazprom owns the pipelines so no matter how much GDF produces elsewhere in the world they will not be able to ship it to Europe to compensate in the next 5-7 years if they start huge CAPEX LNG terminal now.

    EU needs Gazprom as much as it needs EU, one week of Gazprom shut down is 1% of its EBITDA, that is the case of a total meltdown. However for example Germany depends 30% on gas imports from Russian.

    Your only real concern is a diversion on Ukrainian pipeline which would cut Gazproms exports capacity in half assuming full utilisation of the South stream. Stock is trading at its 2009 lows, when world was a far grimmer and uncertain place.

    Anyway I am a buyer of cheap Russia call called Gazprom.
    Mar 13 08:53 AM | 6 Likes Like |Link to Comment
  • Does Argan Have The Moxie To Climb Higher? [View article]
    Hey, please do not take it personally, but there is not enough numbers here but a lot of vague projections. The big cash is a result of the billing in ahead of construction, so you should watch the decline in liabilities against that number.

    Secondly the production of US shale gas has actually been declining since 2010, and gas price has been rising, so I would not make a bullish case for gas power overall. It may be a good thing with AGX though.
    Feb 27 06:46 PM | Likes Like |Link to Comment
  • Argan's High EBIT Margin, Cash Rich Balance Sheet, And Minimal Debt Boost Upside Potential [View article]
    I strongly disagree with the WACC rate you are using, no way that a small cap stock has a cost of equity below S&P 500, that just does not make any sense. Just because the stock does not correlate with the market does not mean its risk premium is lower. Based on similar companies I would say you are looking at north of 9%+Risk Free Rate
    Feb 27 06:35 PM | 1 Like Like |Link to Comment
  • Short Lumber Liquidators: The Secret To Price Damping. [View article]
    Thank you for another valuable contribution to the discussion about the trading idea.
    Nov 23 08:04 AM | Likes Like |Link to Comment
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